UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 8, 2024
SOTHERLY HOTELS INC.
SOTHERLY HOTELS LP
(Exact name of Registrant as Specified in Its Charter)
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Maryland (Sotherly Hotels Inc.) Delaware (Sotherly Hotels LP) | 001-32379 (Sotherly Hotels Inc.) 001-36091 (Sotherly Hotels LP) | 20-1531029 (Sotherly Hotels Inc.) 20-1965427 (Sotherly Hotels LP) |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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306 South Henry Street, Suite 100 Williamsburg, Virginia |
| 23185 |
(Address of Principal Executive Offices) |
| (Zip Code) |
Registrant’s Telephone Number, Including Area Code: (757) 229-5648
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.01 par value | SOHO | The NASDAQ Stock Market LLC |
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | SOHOB | The NASDAQ Stock Market LLC |
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | SOHOO | The NASDAQ Stock Market LLC |
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8.25% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value | SOHON | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Sotherly Hotels Inc. ☐ Sotherly Hotels LP ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Sotherly Hotels Inc. ☐ Sotherly Hotels LP ☐
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On July 8, 2024, affiliates of Sotherly Hotels Inc. (the "Company"), the sole general partner of Sotherly Hotels LP (the "Operating Partnership"), entered into loan documents to secure a mortgage loan (the "Mortgage Loan") on the DoubleTree by Hilton Jacksonville Riverfront hotel (the "Hotel") located in Jacksonville, FL with Fifth Third Bank, N.A. Pursuant to the loan documents, the Mortgage Loan:
•has an initial principal balance of approximately $26.25 million (the "Initial Tranche"), with an additional $9.49 million available to fund a product improvement plan at the Hotel (the "Renovation Tranche");
•has a 5-year term maturing on July 8, 2029;
•carries a floating interest rate of SOFR plus 3.00%;
•the Initial Tranche amortizes on a 25-year schedule at 7.0% interest rate and the Renovation Tranche requires payments of interest only;
•is guaranteed by the Operating Partnership, with the guarantee reducing to 25% upon achieving a 1.35x debt service coverage ratio (DSCR) for two consecutive quarters following a renovation period; and
•contains customary representations, warranties, covenants and events of default for a mortgage loan.
Item 7.01 Regulation FD Disclosure.
On July 9, 2024, the Company issued a press release announcing the transactions effected pursuant to the debt financing of the Hotel. A copy of the press release is attached to the Current Report on Form 8-K as Exhibit 99.1 and incorporated by reference herein.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information included in this Item 7.01 (including Exhibit 99.1 hereto), shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
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Date: July 9, 2024 |
| SOTHERLY HOTELS INC. |
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| By: | /s/ Anthony E. Domalski |
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| Anthony E. Domalski |
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| Chief Financial Officer |
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| SOTHERLY HOTELS LP |
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| | | by its General Partner, |
| | | SOTHERLY HOTELS INC. |
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| By: | /s/ Anthony E. Domalski |
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| Anthony E. Domalski |
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| Chief Financial Officer |
